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1. Field of the Invention
This invention relates to the field of networked computer systems and more particularly the invention relates to using networked computer systems to conduct electronic commerce.
2. Description of the Related Art
Electronic commerce is rapidly growing. Increasing numbers of purchases are being conducted electronically over public networks like the Internet as well as private networks such as corporate intranets. To date, electronic commerce has primarily been employed in the delivery of tangible goods such as computer equipment, bouquets of flowers, airline tickets, etc. Electronic commerce can also be used in the delivery of digital products such as newspaper articles, stock quotes, database query results, movies, etc. Electronic commerce primarily reduces business channel costs. These are the costs associated with processing orders, credit checking, handling payments, etc. Electronic commerce is important for the delivery of digital products in order to keep costs in line with the value of the digital products.
Accordingly, vendors should adopt a method for electronic commerce suitable to the types of transactions that they will be doing with their purchasers. There are three ways vendors presently enable purchasers to participate in electronic commerce: using accounts, accepting credit cards, and accepting electronic cash. Each of these solutions is a variation of traditional commerce methods.
Account based solutions are modeled on the way companies traditionally did business with one anotherxe2x80x94purchase orders and invoices. This system requires that vendors know purchasers because the vendor is extending the credit. Further, as the number of purchasers increases, the paperwork involved in handling the purchase orders and billing customers becomes immense. Although electronic commerce eliminates some of the paperwork, and partially automates the systems, account based solutions are not efficient for either the purchaser or the vendor. Purchasers are required to remember account information for a multitude of vendors and vendors are required to take on a secondary business of providing credit. Given these limitations, it is unsurprising that account based systems are generally not in widespread use in electronic commerce.
Credit card based transaction systems eliminate the credit issue for vendors, but incur other costs. Credit card providers charge 1-3% on each transaction. This charge covers the costs for security, insurance, and the centralized system. This charge makes using credit cards for small purchases unattractive. When electronic commerce is used for the purchase of expensive tangible goods, like computer equipment or plane tickets, credit cards function as well as they do outside the electronic commerce realm. However, it is not feasible to use credit cards for the types of low cost, information-oriented transactions that are a component of electronic commerce.
Credit card transactions also do not support multiple currencies with ease. A vendor might present a purchaser with a display of different currencies, as an indication of the price, but the actual exchange rate that will be in effect when the credit card company settles the accounts may be different. Thus, credit cards do not support reliable pricing in a multi-currency environment.
Credit cards also do not work well in business settings. The credit card approval process looks only to the credit limit on the card, e.g. the credit of the business or the credit line on that corporate card, and not to the budget or authorization process of the company. Further, the company has no control over the purchasing process until after a firm commitment has been made, e.g. when the statement is issued. Therefore, it is not possible to enforce business specific rules on credit card purchases. Credit cards also do not work well for detailed expense tracking. It is difficult at the time of purchase to associate internal tracking or account information with a purchase.
Electronic cash solutions have been created to address some of the shortcomings of credit cards for electronic commerce. A buyer gets xe2x80x9ccoinsxe2x80x9d from her/his bank, and gives them to a merchant when she/he has to pay. The xe2x80x9ccoinsxe2x80x9d are stored as electronic cash either on a smart card or in a software application on a computer. Duplicating a sequence of bits is a lot easier than counterfeiting physical coins or notes, so any electronic cash solution must have systems for verifying the electronic cash and preventing double spending. This requires that the electronic cash be verified by the bank at transaction time. These costs limit the use of the system to transactions that involve at least $0.50. Thus, it is not feasible to use electronic cash for the types of low cost-information oriented transactions that are a component of electronic commerce.
In addition, the various technologies do not currently interoperate. Unlike the credit card industry that is dominated by a small number of mature providers with a high degree of market penetration, electronic cash solutions have a low degree of market penetration. Thus, both the merchant and the buyer must have accounts with the same electronic cash provider.
Present electronic commerce solutions are not well suited to commerce between vendors and purchasers that do not know one another. Present electronic commerce solutions are too costly on a per transaction basis for low priced information purchases that could make up the bulk of electronic commerce. Present electronic commerce solutions do not operate well between different payment methods. Present electronic commerce solutions do not easily permit multi-currency transactions. Accordingly, what is needed is an electronic commerce technique that permits vendors and purchasers to complete extremely large volumes of transactions with very little transactional overhead in multiple currencies with differing types of payment methods.
Some embodiments allow for electronic commerce over a computer network. The network has a purchaser computer and a vendor computer. The network supports business relation structures that represent agreements to extend credit between businesses. The network uses the business relation structures for decision making processes. The network transmits business messages that relate to agreements between businesses, including messages relating to extending credit for purchases.
In some embodiments, the vendor computer creates a proposal. That proposal identifies an item to be purchased as well as the vendor price and other transaction parameters.
In one embodiment, the proposal is sent to an intermediary that shares a business relation with the vendor. This intermediary sends the proposal to other intermediaries via the network until one or more proposals reaches the purchaser. At each stage, the proposal is modified by the intermediary. The modifications can include changing the price to reflect the cost of extending credit and the value added by the intermediary. The purchaser computer may receive multiple proposals depending on the number of paths between the vendor and the purchaser.
A selection signal is received on the purchaser computer that indicates the purchaser wishes to accept one of the proposals. The selected proposal is then transmitted to the vendor computer, along the same path as the initial path. At that point, the transaction is complete and the vendor delivers the good, or service, identified by the proposal.
In some embodiments, the vendor price is specified in the vendor""s currency and the proposal specifies that the purchaser computer requires the price specified in a different currency. The price associated with some of the proposals is then specified in the purchaser""s currency and charges are added to the vendor price of those proposals for performing the currency conversion.
In some embodiments, the computers attach cryptographic signatures to the proposals and the selected proposal. For example, a vendor computer might only accept proposals that are cryptographicly signed by the purchaser computer.
In some embodiments, a receipt is issued by the vendor computer when the vendor receives the selected proposal.
In some embodiments, credit histories and transaction performance histories limit the search of the business relation structures. For example, business relation structures that indicate a business has poor credit history will not be included in the paths found by the search of the business relation structures.
In some embodiments, the vendor can quickly establish a commerce site from an existing web site by associating a flag containing a price with content and goods that come with a price. Then, the vendor operates a cash register program so that the data flowing from the web server to the client is intercepted by the cash register. The cash register delays delivery of the data to the client while a proposal is generated and routed to the client. Once the proposal has been accepted, the cash register will complete the delivery of the requested data to the client.